Great and interesting post about U.S. citizenship abroad. Some familiar faces. The post includes:
Interesting FATCA and tax compliance post from Mr. Mopsick which includes:
For both Americans abroad and recent immigrants: Millions of people are agonizing over the question, “Should I just blow it off or do I really need to take some action?” The answer is easy: Whether you take action or not is all based on your personal tolerance level for risk and uncertainty. It is your decision to make. Many people are totally comfortable with the idea that they will never get caught violating the tax laws by not reporting foreign income and accounts or for some reason don’t care if they do get caught. This is because it is one thing for the IRS to compute a tax due and owing from a delinquent taxpayer, but the IRS is years away from routine collection in the ordinary course of delinquent taxes from Americans overseas, provided there are no periodic or regular payments like Social Security payments or pension payments leaving the US for accounts abroad.
Leaving one with the question for Americans abroad:
Is it more dangerous to be IN tax compliance or NOT in tax compliance?
Time will tell. If Mr. Mopsick is correct in his analysis, this suggests those NOT in tax compliance have time to respond to their situation and NOT react!
- #FATCA is sure to create and exacerbate tensions between Homelanders and #Americansabroad (renounceuscitizenship.wordpress.com)
- Will FATCA Ever Go Into Effect? (forbes.com)
- #FATCA and human freedom – 2011 and 2013 perspectives from @WendyMcElroy1 (renounceuscitizenship.wordpress.com)
- War Report: Local perspective on #OVDP for Swiss banks and #Americansabroad in Switzerland (renounceuscitizenship.wordpress.com)
- Amid IRS Abuse, Record Number of Americans Give Up U.S. Citizenship (rinf.com)
- Amid IRS Abuse, Record Number of Americans Give Up U.S. Citizenship (wchildblog.com)
- Required reading for countries considering a #FATCA IGA with the US (renounceuscitizenship.wordpress.com)
The following comment appeared to my recent post:
As usual, you put the narrative together VERY well, and are so correct! and they all clamor to comply…
See this comment…
December 7, 2013 at 6:44 am
The print-edition of the Handelszeitung (HZ) has an interview with the Paolo Cornaro (PC), CEO of Corner Bank, a credit-card bank in Switzerland. He seems to indicate that the tax deal between the Swiss and the US governments is more about extortion than about an agreement (translated):
“HZ: The US tax dispute is further along. How do you judge the agreement?
PC: This program, which I cannot characterize as an agreement with good conscience, strikes all banks as a block. It does not make a distinction between banks which consciously went on American soil to acquire customers and those banks, to name an extreme example, that opened accounts for two Swiss who were also coincidentally in possession of US citizenship. We know today which banks are Category 1. Since we never actively pursued American customers, we should be in Category 3. With this view, however, we are exposed to the risk in the event that documentation is not water-tight that we would have to accept additional liability.
HZ: You must decide no later than December 9?
PC: It certainly could happen that there are banks which will not be so far. We will classify ourselves in Category 2 in order to avoid further discussions and risk a penalty. We have American customers who are properly declared. The program’s concept is however that all are tax evaders. Then we must prove that this is not the case.
HZ: What kind of penalty are you looking at?
PC: I cannot and do not want to mention a number. We want to close a chapter by paying a penalty and then can we look forward again.
HZ: You will pay in order to have peace and quiet?
PC: Yes. We found ourselves in a similar situation in connection with the “unidentified accounts” matter. Our bank was founded in 1952 so there was certainly no unidentified accounts coming out of the war. We decided to pay anyway. Towards the end of the matter the actions were directed at all Swiss banks. If we wanted to continue with a US dollar clearing account, we had to pay. It didn’t matter whether we were guilty or not. We booked the payment as a solidarity contribution. Also at that time we wanted to simply conclude the matter.”
Do they really think this just conclude the matter so simply? Extortion at a grand scale.
as James Jatras so eloquently said…
Who is advising these people? How naive can they be? They really think an admission of guilt is the end of their ordeal, not just the beginning? Once the Mark of Cain is stamped onto their forehead it never comes off
Basking in the glory of OVDP and the FBAR Fundraiser for Individuals:
The Department of Justice Announces OVDP for Banks!
On August 30, 2013 the U.S. Department of Justice created a voluntary disclosure program for Swiss banks. It was clearly premised on the OVDP program for people. My post describing OVDP for banks ended with:
The threat of FATCA enforcement has impacted every jurisdiction in the world and the global financial industry is quaking with fear. The US Justice Department has taken the position that the entire non-US financial industry is potentially part of a continuing criminal conspiracy with some US individuals and multi-national companies to evade US income tax. The Justice Department has unilaterally forged ahead to obtain indictments and convictions over prominent foreign banks, bankers, and some of their US customers. The United States justification for claiming the moral high ground is that it is merely seeking to have all US taxpayers pay tax as required under US law.
The title of the article by Lynnley Browning is:
“Swiss agree on penalties for banks that aided tax cheats”
A review of the article suggests that the U.S. government is attempting to impose on Swiss Banks a program that is like the “OVDI-OVDP” program.
The article begins with:
Assuming the correctness of this, it is very big. It signals that the focus of the IRS may be moving away from penalties and toward getting people back into the system! Note the discussion of the role of Taxpayer Advocate.
The title of this post was a Google search term that led to a number of hits. A search on Bing led to an equally impressive number of hits. (Note that each search revealed results for “why we are so cruel to us citizen living abroad“.) Fascinating question. How can this be? Why is this so?